Forum Energy (FET) Q2 Orders Jump 46%

Key Points

• GAAP earnings per share reached $0.61, well above analyst expectations (GAAP), but adjusted EPS was a net loss of $0.10.

• Revenue (GAAP) was $199.8 million, beating the $190.35 million GAAP estimate, though still down 2.6% compared to the prior year.

• Order intake increased 31.1% to $263.1 million compared to the previous quarter, setting a decade-high backlog and driving strong forward visibility.

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Forum Energy Technologies (NYSE:FET), a provider of equipment and engineered solutions for the oil, gas, and renewables markets, posted its second quarter 2025 earnings on August 7, 2025. Forum Energy Technologies reported GAAP earnings per share of $0.61, smashing the analyst estimate of $0.12 GAAP EPS. Revenue (GAAP) came in at $199.8 million, topping GAAP expectations of $190.35 million. However, adjusted for a one-time property gain and foreign exchange benefits, the company had a net loss of $0.10 per share. Despite the revenue (GAAP) beat, the quarter exposed persistent margin pressure within key segments and underlying challenges that bear monitoring.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Company Overview and Business Focus

Forum Energy Technologies delivers equipment, technology, and aftermarket services that help oil, gas, and renewable energy operators achieve greater safety, efficiency, and environmental compliance. Its business is built around two central segments: Drilling and Completions, which covers drilling, subsea, coiled tubing, well stimulation, and intervention markets; and Artificial Lift and Downhole, which provides products and solutions for artificial lift, well construction, production, and infrastructure markets. The company's portfolio spans highly engineered capital equipment, consumable parts required for regular operation, and technical service support.

Recent strategic priorities center on innovation, broadening the product mix, and increasing exposure to growth pockets like offshore wind, subsea defense, and renewable energy infrastructure. Key to its long-term success is the ability to manage regulatory shifts, supply chain challenges, and emerging market needs while maintaining steady positive cash flow and healthy balance sheet metrics.

Quarter in Review: Notable Developments and Segment Highlights

The quarter was marked by a sharp difference between reported (GAAP) and adjusted (non-GAAP) earnings, mainly due to one-off events. GAAP net income included a $6.6 million gain from a property sale-leaseback and $4 million in foreign exchange gains. Excluding these items, adjusted earnings per share swung to a $0.10 loss, reflecting a core business more affected by margin declines and sector pressures than the headline number suggests.

The revenue (GAAP) figure outpaced expectations. Orders increased to $263.1 million, up from $180.1 million in Q2 2024, bringing the book-to-bill ratio—the ratio of new orders to revenue—to 1.32. This provides improved visibility for future quarters. Within segments, Drilling and Completions revenue was $117.2 million and saw a 1% sequential rise in Drilling and Completions segment revenue, but adjusted segment EBITDA retreated 8% due to lower sales of its highest-margin products. Artificial Lift and Downhole revenue reached $82.5 million, up 6% from the prior quarter, and delivered adjusted EBITDA growth of 24%, driven by healthy demand in processing, downhole casing, and sand control product lines.

Forum Energy Technologies' product mix spans key oilfield equipment types such as coiled tubing (for well interventions and maintenance), downhole tools (for automated well operation and sand management), subsea systems (defense and marine offshore), and valve solutions (flow control hardware). Its "Unity" remote operation software, designed for equipment monitoring, saw about eight new sales in the first half of 2025. The Power Tron cooling system for data centers is another product line seeing increased uptake in data center and power applications.

Operational performance was shaped by a mix of external and internal factors. Tariff-driven price increases, especially on valve imports from China, led to a “buyer strike” and softer results in that area during the first half of 2025. Strategic supply chain moves—including increased use of international assembly and inventory management—helped offset some cost inflation. Cost-saving initiatives produced incremental improvement, with benefits expected to build into future quarters. Notably, this was the company’s eighth consecutive quarter of positive free cash flow, and it ended the quarter with $39.0 million in cash and $334.2 million in equity, targeting 1.3x net leverage by year-end 2025. The company repurchased approximately 5% of its outstanding shares through July 2025 and aims for further buybacks if leverage targets are met.

Looking Ahead: Outlook and Investor Focus Areas

Management raised its free cash flow target to a range of $60 million to $80 million, up from an initial estimate of $40 million to $60 million. Forum Energy Technologies provided a full-year adjusted EBITDA forecast of approximately $85 million and indicated expectations of adjusted EBITDA between $19 million and $23 million for the next quarter. The company previewed continued focus on reducing net debt and opportunistic share repurchases, subject to leverage tests.

While growth in orders and backlog provides a buffer, the company reported orders of $263 million and stated that backlog reached its highest level in over ten years, company leadership remains watchful for further declines in industry activity, particularly in U.S. short-cycle segments. Investors may want to monitor the pace of recovery in margin performance, the sustainability of order momentum in offshore and defense, the impact of tariffs on product demand, and progress in both innovation and exposure to emerging markets.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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